Euro bonds have shown a positive move on the international market as the kwacha continues appreciating following Hakainde Hichilema’s landslide victory.
Bankers Association of Zambia (BAZ) Chief Executive Officer (CEO) Leonard Mwanza said the international market is reacting positively to the coming in of a new government.
Mr. Mwanza said the warming up of the market to the decision that Zambians have made is a good influence for off-shore market players to participate in the Zambian bond market.
The CEO added that with the Special Drawing Rights (SDR) coming through from the International Monetary Fund (IMF), the international reserves are expected to double.
He said the continued discussion of the IMF program, if realized in time, will enable the government to restructure the Euro bond and commercial debt.
Once Euro bonds are restructured, coupled with the very likely IMF program coming on board, it will help reduce the amount of money government pays for Euro bonds and will extend the time the government has to pay back,
Mr. Mwanza said.
Mr. Mwanza further said IMF has allocated 1.3 billion United States Dollars to Zambia under the SDR to support the international reserves of the country.
He said the SDR will act as a cover to utilize when making any international payments as a country.
Meanwhile, Economic Analyst Yusuf Dodia said it is a good thing to receive positive sentiments from the international market.
He however said that the country needs to recognize that it is not sustainable.
The danger with this is that they make us think we are being supported by the developed economies when in fact what the developing economies are trying to do is to continue the friendship we had in the past,
Mr. Dodia said.
Mr. Dodia further said that Zambia needs to look at the challenges on ground that need to be addressed.
He added that one of the challenges is that foreign currency that comes into the country is not controlled by the government.
We need to have in place a rule and a regulation that demands that when you export a product from Zambia, those export earnings must come to Zambian banks first before you can use them for any other transactions,
Mr. Dodia said.
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